Health insurance CEOs continue to feel the pressure

In his speech today at Arcadia University just outside of Philadelphia, Obama told a crowd of supporters: “My question to (insurance companies) is, ‘When is the right time? If not now, when? If not us, who?”

With several members of Congress in attendance, Obama encouraged swift legislative action to tame insurance companies.

“They’re okay with people being priced out of the insurance market because, first of all, a lot of folks are going to be stuck,” Obama said, “And even if some people drop out, they’ll still make more money by raising premiums on customers that they keep.”

“Last Thursday, I asked CEOs to post online the actuarial justification for premium hikes so consumers can see why their premiums are skyrocketing.” said Sebelius. “If insurance companies are going to raise rates, the least they can do is tell us why.”

In her letter to the CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc., Sebelius asked the insurers to disclose (among other items) estimates on medical cost and utilization increases, as well as a description of what accounts for the difference if premiums increase more than estimated medical costs.Sebelius also asked for the number of people who will be affected by premium increases, how the company plans to improve the affordability of health care, and the estimated financial impact of the company’s affordability initiatives.

Recently Sebelius questioned Wellpoint when one of its Anthem Blue Cross plans in California raised premiums by 39 percent. Wellpoint blamed their rising medical costs and a pool of customers that is gradually becoming older and sicker as younger, healthier people drop their coverage.

Wellpoint’s response doesn’t fit well with a new analysis from Goldman Sachs, which found that competition in the insurance market is so weak, insurance companies can continue to raise rates even if it means losing customers. The analysis found that “price competition is down” and that “incumbent carriers seem more willing than ever to walk away from existing business.”